GST - what it means to us?
From the vague vantage point that I occupy today, I write this article. Therefore, the information I am privy too is very little except most that is available on the media. Based on this information, I give you another vague perception of what to expect.
However, the lines of progress are clear. GST has grown old under discussion stage itself and has lost most of its original charm.
1. There will be a central GST and a State GST. Sounds very similar to Central Sales Tax and the State Sales Tax. Only advantage, no two numbers. One number but two accounts to pay. You make a mistake, you pay the penalty. They don't adjust between themselves! Same as today. Yes, of course, the Excise is not there! That is a big saving.
2. Who does the scrutiny or audit checks? The fight is still on. Both want the right to do the audit. Because that is where they can make their money. Who would leave that out? From the way, it is progressing, both will end up making the audit on our accounts. Result: You will have at least two checks, reports, forms to be submitted every quarter / month or period that is finalised. And two sets of people whom you should answer. Same as today.
3. Tax today, they claim comes to about 37% on an average. We have always been telling them that the taxes with Excise duty comes to about 40 to 50% of any product we buy. At last the government has accepted that it is charging close to what we claimed, 37%. Government claims that it is reducing the tax level to 20 to 25%. Congress wants a ceiling at 18% on GST. All over the world the GST rates are as follows:
Australia - 10%
Canada - 5%
The US - Varies 6.5% average
The UK - 0% to 20%.
China - 17% max with many exceptions
France - 2.1% to 20%
We are hovering around 22%, moved from 18%. Where will it stop is anybody's guess.
4. So, there is no immediate relief to the tax payer in any form once the GST is introduced.
There is that desire that once GST comes in, more systemic changes might also be ushered in. We hope and dream of a taxpayer friendly system. But there does not seem to be any move towards that. Proactive taxation is still afar. With the government looking up tax papers three years after the returns, any scrutiny is a threat rather than a real methodology to catch an evader. Moreover, with no methodology to identify and bring to book evaders of tax in place, this is one more step to scrutinise honest citizens and not the dishonest ones.
However, the lines of progress are clear. GST has grown old under discussion stage itself and has lost most of its original charm.
1. There will be a central GST and a State GST. Sounds very similar to Central Sales Tax and the State Sales Tax. Only advantage, no two numbers. One number but two accounts to pay. You make a mistake, you pay the penalty. They don't adjust between themselves! Same as today. Yes, of course, the Excise is not there! That is a big saving.
2. Who does the scrutiny or audit checks? The fight is still on. Both want the right to do the audit. Because that is where they can make their money. Who would leave that out? From the way, it is progressing, both will end up making the audit on our accounts. Result: You will have at least two checks, reports, forms to be submitted every quarter / month or period that is finalised. And two sets of people whom you should answer. Same as today.
3. Tax today, they claim comes to about 37% on an average. We have always been telling them that the taxes with Excise duty comes to about 40 to 50% of any product we buy. At last the government has accepted that it is charging close to what we claimed, 37%. Government claims that it is reducing the tax level to 20 to 25%. Congress wants a ceiling at 18% on GST. All over the world the GST rates are as follows:
Australia - 10%
Canada - 5%
The US - Varies 6.5% average
The UK - 0% to 20%.
China - 17% max with many exceptions
France - 2.1% to 20%
We are hovering around 22%, moved from 18%. Where will it stop is anybody's guess.
4. So, there is no immediate relief to the tax payer in any form once the GST is introduced.
There is that desire that once GST comes in, more systemic changes might also be ushered in. We hope and dream of a taxpayer friendly system. But there does not seem to be any move towards that. Proactive taxation is still afar. With the government looking up tax papers three years after the returns, any scrutiny is a threat rather than a real methodology to catch an evader. Moreover, with no methodology to identify and bring to book evaders of tax in place, this is one more step to scrutinise honest citizens and not the dishonest ones.
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